Other Voices

The Great Mania

Reinflating the collapsed housing bubble, as many desire, would likely yield the same disastrous result. What's needed are lower, fairer prices, and more investment in more productive sectors of the economy.

The full story about housing and the economy has been ignored too long. Like all manias, it was a long time building.

The boom of the 1950s and 1960s, featuring rising incomes and wealth, occurred in a well-balanced economy. The benefits of economic growth were fairly evenly distributed. That was an economy where the U.S. manufacturing sector was competitive and flourishing, its infrastructure was adequate and being improved, and housing valuations were at least fair, if not cheap. The value of housing averaged 80% to 90%...